Dollar Slips Against JPY as US Rate Hike Probability Lower

The U.S. dollar briefly slipped to the mid-111 yen range Tuesday morning in Tokyo, its lowest level in about two months, as traders continued to buy the Japanese currency amid receding expectations of a near-term U.S. interest rate hike.

At noon, the dollar fetched 111.83-84 yen compared with 111.68-78 yen in New York and 112.73-75 yen in Tokyo at 5 p.m. Monday.

The euro was quoted at $1.0722-0723 and 119.90-92 yen against $1.0745-0755 and 120.04-14 yen in New York and $1.0751-0753 and 121.20-24 yen in Tokyo late Monday afternoon.

The dollar pared earlier losses toward noon but its gains were capped as expectations of a Federal Reserve interest rate hike in March have waned after a U.S. jobs report showed Friday weaker-than-expected wage growth in January, dealers said.

The yen, perceived as a safe-haven asset, also drew buying amid growing political uncertainties in Europe as Marine Le Pen, the leader of France’s far-right party, launched her presidential election bid vowing to fight globalization and hold a referendum on the country’s European Union membership, the dealers said.

Recent opinion polls suggested Le Pen will win the first round of the two-stage presidential election in spring.

via Mainichi

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza